How does my ISP make money?

Question

How does my ISP make money and who do they have to pay money to? I have a DSL connection and they charge a flat rental regardless of my usage. Do they incur any loss if I download all the time?

Answer 1

They get a banwidth and you downloading all the time only eats a portion of it, they have it to where if everyone downloaed then you all would get a slower connection

Answer 2

ISP's make money by charging you for monthly service, providing connectivity from their location to your home.  They in turn pay the 'core' internet backbone providers (ibp) for a connection from their office location to the 'Internet', the actual long distance fiber optics and switches that cover the world.  All these providers need to pay for the hardware they use, and for the size of the connection to that backbone.  If all their users suddenly started downloading torrents constantly, they would exceed the size of their connection quickly, which would result in poor performance for all users.  That is why some ISP's are beginning to charge based on bandwidth used, because that is fairer to all users.  Let the high volume users pay more, while the occasional surfer pays less.

Answer 3

They don't lose any money if you download all day.

Here's a quick example of how it works, Okay here's the metaphor,

Let's say Microsoft sells a server that can connect to sattellites DSL and up, (cable, T1, T3, etc..) Your ISP will buy that server and sell it at a reasonable price 'til they make their profit.

Help any? :P

Answer 4

You pay for the full time use with that flat fee.  Using it or not, your ISP provider is making money when you sign up with their service.  Using/downloading file/s all the time will not increase the provider's operational cost.

Answer 5

Your ISP makes money when you pay them a monthly fee. They pay for the maintaining the equipment to get information to and from your house and their POP (point of presence).

They also pay to get information to and from their POP and the entire rest of the world. Exactly who they pay depends on a lot of complicated details (like whether they own an international, regional, or local network and whether they own their fiber or not). But basically, they pay to move information around the world, either doing it themselves and paying for equipment and maintenance or by paying others to do it.

When your usage goes up, their usage goes up throughout the system. Ultimately, this will affect what upgrades they have to make and when.

Your town isn't going to add a new main line to the city because you left your light switch on, your electrical usage adds to everyone else's and affects when new power plants and power lines are needed. It's the same. You could download full speed all the time, and it alone wouldn't affect your ISP. But the overall usage of all their customers determines when they need to add and upgrade lines and interconnects.

A better analogy might be a town with flat-rate water. If you leave your tap on 24 hours a day, 7 days a week, they won't have to add a new treatment plant. But it does increase their overall usage, and if everyone did that, they'd need a lot more plants.

Answer 6

isp's front the money for the infrastrucutre that is used to bring u ure ability to use the internet. similar to phone companies. so in essecne, their core product costs them nothing to provide (i.e to provide internet there is no cost to them, in the sense that it would cost a shop money to purhase stock to re-sell to you), however they make vast capital outlay for infrastructre. so you pay them rental, and that goes to covering  their working capital as well as servicing thier loans on the infrastructure, and profit